Striking Greek Truck Owners in Trouble

By Nick Skrekas

EPA

Trucks lined up at the side of the national highway near Athens.

As the strike by Greek truck drivers runs the course of its fourth day strangling fuel supplies, distressing local drivers and devastating the critical tourism sector at its peak, their unions have found no political friends and public opinion is increasingly hostile toward them.

The strike is an attempt to roll back liberalization of the sector, or as its known locally “opening up closed-off professions.” At its heart the strikers don’t want their valuable licenses -– worth anywhere between €90,000 to €200,000 — to evaporate to worthless in three years. And they are not appeased by the offer by the Transport Ministry that would allow the current value of the license to be counted as equity capital in newly formed companies.

Interestingly, these licenses were issued under a law passed by the military junta in the 1970s. Since then they have been transferred between truck drivers in the gray market, have never been taxed and their value has never been declared as an asset to any authorities. And now some truck drivers are suggesting that the cash strapped Mediterranean country compensate drivers for the depreciation of their license asset or else they won’t return to work. Let’s get real!

A cynic can readily conclude that the indefinite wild cat strike is all about the money, extending the interim period to five years from three years for implementation of reforms and maintaining as many barriers to entry in the overland transport sector as possible.

This is a sector that makes up 7% of Greece’s gross domestic product, which has a capacity of 33,000 vehicles and employs about 110,000 people. The policy the socialist party wants to implement, which has been mandated by the European Union and the International Monetary Fund, seeks to do exactly the opposite of truck union demands. It wants the fragmented sector to consolidate to create economies of scale, lower transport costs and to increase productivity and employment. Savings can then be passed on to end consumers.

But the kind of blackmail truckers are engaging in is not something that sits well with the broad spectrum of politicians. Left wing parties have not leapt to the trucker’s defense and even the hard core communist party, KKE, which usually applauds any and all industrial action, has been muted in its support. Politically the truckers have no friends as they make their mischief.

For its part the socialist government has a good track record since taking over in October of 2009 in facing down strikes that emerge to protect special interests. It rightly argues that it has the wholehearted support of the silent majority of Greeks, who recognize that the whole country has to make sacrifices and implement reforms to avoid bankruptcy.

Prime Minister George Papandreou does not have a confrontational style and this has been evident in many of his decisions. For example he has refrained from sending in riot police to hammer various strikers. Moreover, Papandreou and his government have always been open to further dialogue with all parties–but he has not given in to special interests nor has he watered down reforms demanded by Greece’s creditors.

Over the last 11 months numerous protest groups — like taxi drivers, air controllers, service station owners, pharmacists, lawyers, dock workers and farmers -– have all found out that Papandreou won’t relent in the face of potential political cost from disruptions. His resolve is solid.

And the local press has been on the socialist government’s side as they have picked up on the popular discontent and inconvenience, as well as the damage being done to an economy struggling with recession and heavy debts.

Currently, on some of Greece’s islands and in its remote rural areas, the shortages of fuel and some goods are even more acute than those in the big cities — so the disruption has dealt a further blow to Greece’s struggling tourist industry right at its peak.

However, while the government speaks softly it carries a big stick. The final solution is its threat to issue a civil mobilization order of the sector — legally compelling the truckers to resume work — if the strike drags on beyond Thursday. The Greek constitution provides exactly this last resort remedy when the nation’s interest is being irreversibly damaged.

The truckers are isolated like pariahs by political parties and society and the full weight of the law is going to come down on them so they will be back to square one. The only thing they will have achieved is to damage the reputation and economy of a beleaguered nation in its moments of greatest need for cohesion and consensus.

Comments (5 of 15)

The ultra-left wing Greek junta in power now, led by a Yank-schooled, totally Yankified, uses the typical commie tactics of impounding people's property (their fuel trucks) and further threatening them with punishment for having them. Makes one think of Stalin, the best ally of Yankistan in the 1940s, with whom Yank leaders divided Europe in a cordial agreement at Yalta (with the fat alcoholic Churchill acting as an accoutrement to the deal).

Pathetic. And disgusting.

1:59 am July 31, 2010

Emre wrote:

Why all the fuss about striking Greek truck drivers? There are much more serious issues going on in the world than this tiny country that no one even cared about last year! It's just strange that the blinding media spotlight insists on still bearing down on Greece. Look at your own countries and try to improve them. Stop criticizing and offering (well intentioned but empty) opinions--yeah I know we all think we're brilliant individuals, but half the info we're fed and derive conclusions from is not real *gasp!* There, I said it!

8:36 am July 30, 2010

World Wide News Flash wrote:

Striking Greek Truck Owners in Trouble - The Source - WSJ...

I found your entry interesting do I've added a Trackback to it on my weblog ...

7:38 pm July 29, 2010

Pergamon-D wrote:

Your losing the track here. That's a natioanlist debate for another time. While there is little simpathy for most truck drivers, I think anyone who bought an expensive license 3 years ago has a case. They would not have the chance to earn enough for it and will suffer from a loss of their asset. But no excuse for those that have had licenses in the medium term - they need to learn to corporatize and compete.

4:58 pm July 29, 2010

Ali_Z wrote:

Confusing Greek economic liberalization with foreign policy is a mistake. If Skopje was not trying to exappropriate Greek history and culture and if it also was not making claims on Hellenic and Bulgarian territory, no one would be blocking their accession to NATO and the EU. And The Former Yugoslav Republic of Macedonia (FYROM) is historically Vardaska. Their supposed name of Macedonia has only resulted from Titos' communist brain washing. Its sad that a territory with no identity has to steal it from its neighbours and expects no response to its rewriting of history. And don't forget Greeks control a significant section of businesses in FYROM, so its not wise to upset your neighbours. Moreover, Greece currently has no blockade against Skopje but expects them to be constructive enough to reach a solution over its name in good faith. Why won't they accept Norther Macedonia?

Thanks for reading The Source. We would like to direct you to MoneyBeat, the Wall Street Journal’s brand new global blog. MoneyBeat unites MarketBeat, The Source, Overheard and all the Deal Journal blogs, bringing together all the market, M&A, IPO and hedge-fund news from those blogs into a 24-hour hub for finance news. Check it out and let us know what you think at moneyblog@wsj.com.